What Is The Difference Between Bitcoin And Ripple?

Bitcoin is still the king of cryptocurrencies, particularly when it comes to price rises and press coverage. But there are several pretenders vying for the throne, and one of them is Ripple.

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Adobe Stock

But what exactly is Ripple, what makes it different from Bitcoin – and why do some people not consider it to be a cryptocurrency in the truest sense? And, as always, remember that investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.

Ripple Network v XRP

The first thing that needs addressing is that Ripple itself is not a cryptocurrency in the same way as for example Bitcoin, Ether or Litecoin are. Ripple is actually a payment settling system, designed to provide a faster, more transparent and secure alternative to those already used by banks, for example the SWIFT payment system.

XRP – which is the actual cryptocurrency – is a token which is used on the Ripple network to facilitate transfers of money between different currencies. Existing settlement systems generally use US dollars as a common currency for converting between other currencies. This incurs currency exchange fees and takes time – which is why bank transfers between accounts in different countries often take up to three days to process.

By first converting the value of the transfer into XRP, rather than USD, exchange fees are eliminated and processing of payments is reduced to seconds.

Banks including Fidor Bank, Santander, the Commonwealth Bank of Australia and a consortium of 61 Japanese banks have all said that they are trialling or implementing applications utilizing the Ripple Network payment system.

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Bitcoin is still the king of cryptocurrencies, particularly when it comes to price rises and press coverage. But there are several pretenders vying for the throne, and one of them is Ripple.

Adobe Stock

Adobe Stock

But what exactly is Ripple, what makes it different from Bitcoin – and why do some people not consider it to be a cryptocurrency in the truest sense? And, as always, remember that investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.

Ripple Network v XRP

The first thing that needs addressing is that Ripple itself is not a cryptocurrency in the same way as for example Bitcoin, Ether or Litecoin are. Ripple is actually a payment settling system, designed to provide a faster, more transparent and secure alternative to those already used by banks, for example the SWIFT payment system.

XRP – which is the actual cryptocurrency – is a token which is used on the Ripple network to facilitate transfers of money between different currencies. Existing settlement systems generally use US dollars as a common currency for converting between other currencies. This incurs currency exchange fees and takes time – which is why bank transfers between accounts in different countries often take up to three days to process.

By first converting the value of the transfer into XRP, rather than USD, exchange fees are eliminated and processing of payments is reduced to seconds.

Banks including Fidor Bank, Santander, the Commonwealth Bank of Australia and a consortium of 61 Japanese banks have all said that they are trialling or implementing applications utilizing the Ripple Network payment system.